Preview

types of financial intermediaries

Satisfactory Essays
Open Document
Open Document
306 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
types of financial intermediaries
A.) CREDIT UNIONS - A nonprofit financial cooperative offering deposit accounts, low-interest loans, etc.
As soon as you deposit funds into a credit union account, you become a partial owner and participate in the union's profitability. Credit unions are formed by large corporations and organizations for their employees and members.

B.) MUTUAL FUNDS - An investment program funded by shareholders that trades in diversified holdings and is professionally managed. C.) FINANCE COMPANIES - A company concerned primarily with providing money, e.g., for short-term loans. Specialized financial institution that supplies credit for the purchase of consumer goods and services. Finance companies purchase unpaid customer accounts at a discount from merchants and collect payments due from customers. They also grant small loans directly to consumers at a relatively high rate of interest.

D.) PENSION FUNDS - Pension funds are commonly run by some sort of financial intermediary for the company and its employees, although some larger corporations operate their pension funds in-house. Pension funds control relatively large amounts of capital and represent the largest institutional investors in many nations.

E.) LIFE INSURANCE COMPANIES - The goal of life insurance is to provide a measure of financial security for your family after you die. So, before purchasing a life insurance policy, you should consider your financial situation and the standard of living you want to maintain for your dependents or survivors. For example, who will be responsible for your funeral costs and final medical bills? Would your family have to relocate? Will there be adequate funds for future or ongoing expenses such as daycare, mortgage payments and college? It is prudent to re-evaluate your life insurance policies annually or when you experience a major life event like marriage, divorce, the birth or adoption of a child, or purchase of a major item such as a house or business.

You May Also Find These Documents Helpful

  • Good Essays

    Members of the family will have assessed their family’s total economic needs. This includes income needed to maintain an adequate lifestyle for them, extra expenses if the income producer dies, special needs of dependents, debt liquidation and liquidity. Next. The family will have determined what financial resources that will be available after death. Then, they will then take what they’ve assed for their family’s total economic needs and subtracted the financial resources available after death which equals the amount of additional life insurance required to protect their family. Afterwards, the family will need to take into consideration some life insurance underwriting to then come to the conclusion of which life insurance is right for them. The smart, well informed family will have done their homework and gone over the pros and cons of each type, comparing costs features, insurance companies and agents. They will have looked at the life insurance contract features and other policy features. The family can use online tools to assist them in their decision making process, to divide up the proceeds, and are aware of the breadwinners’ life…

    • 644 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Credit unions are financial institutions formed by an organized group of people with a common bond. Members of credit unions pool their assets to provide loans and other financial services to each other. Unlike banks, credit unions exist solely to serve their members; and do not have to pay dividends to an outside group of stockholders. Instead, credit union income is returned to members in the form of better rates, lower fees and innovative services.…

    • 1474 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    The first term is finance. Finance is managing money or supplying funds to provide a resource. A bank or loan company is a source of finance because they both provide cash. Cash is the resource that one needs to survive or make a purchase. For instance, when a customer walks into a car dealership and is ready to buy a car, the salesperson draws up the paperwork and two items are in need. The first item is cash and the second is the search for a finance company to finance the car. The role of finance in this example is the customer can provide the cash to make the purchase and the finance company can supply the funds and terms of agreement to help the owner purchase the car.…

    • 1187 Words
    • 5 Pages
    Powerful Essays
  • Satisfactory Essays

    When you purchase a life insurance policy, you receive a guarantee from your insurance company that your beneficiaries will receive financial help after you pass away. This money protects your loved ones, helping to safeguard their future by providing income to cover their expenses. The business insurance team at Maupin Insurance & Financial Services - Allstate Agency, located in Winchester, KY, explains the ways that life insurance protects the people you love.…

    • 331 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Many people purchase life insurance because it is a great way to financially protect their loved ones at a time when they need help the most. It demonstrates to your family that you care about them so much that you want to secure their financial future if you pass away prematurely. The commercial insurance team at Mid Rivers Insurance Group, which provides clients in the St. Charles County and Greater St. Louis area with affordable insurance policies, explain the reasons why you need a life insurance policy.…

    • 306 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Financial Intermediaries

    • 2598 Words
    • 11 Pages

    ― RBI is the Central Bank of India. ― It started functioning from 1st April, 1935. It was established under The Reserve Bank of India Act, 1934. RBI was previously (till 1949) under management of private shareholders. ― The Central Govt. has authority to guide, regulate & monitor the activities of RBI. It has the authority to appoint the Governor & Deputy Governors. ― RBI is…

    • 2598 Words
    • 11 Pages
    Powerful Essays
  • Satisfactory Essays

    Financial intermediaries

    • 570 Words
    • 2 Pages

    Financial intermediaries, particularly banks, are the most important source of external funds used to finance businesses (slide 9-chapter 7)…

    • 570 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    (in S. B. Dahiya and V. Orati (eds.) Economic Theory in the Light of Schumpeter 's Scientific Heritage, Spellbound Publishers, Rohtak, India, 2001)…

    • 4238 Words
    • 17 Pages
    Powerful Essays
  • Good Essays

    He explains before deciding an insurance ask yourself why do you need life insurance. One reason it’s an affordable way to provide for your family if you become decease, pay for funerals and also debts. Mr. Fier also explains how to decide how much life insurance you’ll need by taking the amount of income you make each year and multiplying it 3 or 5 times to determine the amount you’ll need. He also states that it’s good to know which insurance is best for you between term life and whole life insurance. The difference between the two is the price and coverage. Last but not lease which company should you buy life insurance from. However you can determine that by the ratings of the company, find one that’s going to help with your problems and come up with recommendations for your needs. For example (http://www3.ambest.com/ratings/entities/CompanyProfile.aspx?BL=0&ambnum=7299&AltNum=14937299&AltSrc=3 ) Gerber Life Insurance has a rating of…

    • 742 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Financial Intermediation

    • 519 Words
    • 3 Pages

    Financial intermediation consists of transforming funds between surplus and deficit units. This can take place indirectly through depositories or directly through investment banks, per say. In the article Dell Deal Done Differently, “stapling financing” was the controversial practice taken place. Stapling financing as depicted in the article is an act investment banks premeditate when offering a finance packaging to bidders during acquisition. This is a part of financial intermediation because it includes negotiation terms that providing the financing, a business with higher fees.…

    • 519 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    zcvszc

    • 1660 Words
    • 7 Pages

    Fidelity Investments manages a large family of mutual funds, provides fund distribution and investment advice services, as well as providing discountbrokerage services, retirement services, wealth management, securities execution and clearance, life insurance and a number of other services.…

    • 1660 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    Credit unions are nonprofit, cooperative institutions designed to pool the savings of their members and to lend to other members.(William &Ivan, 1982) Credit unions were established by local groups of volunteers in towns and within in areas with the target of creating locally accessible, co-operative financial services, particularly for people who found it difficult to look for financial support.…

    • 2593 Words
    • 9 Pages
    Powerful Essays
  • Good Essays

    He explains before deciding an insurance, ask yourself why I need life insurance. One reason it’s an affordable way to provide for your family if you become decease, pay for funerals and also debts. Mr. Fier also explains how to decide how much life insurance you’ll need by taking the amount of income you make each year and multiplying it 3 or 5 times to determine the amount you’ll need. He also states that it’s suitable to know which insurance is best for you between term life and whole life insurance. The difference between the two is the price and coverage. Last but not lease which company should you buy life insurance from. However you can determine that by the ratings of the company, find one that’s going to help with your problems and come up with recommendations for your needs. For example (http://www3.ambest.com/ratings/entities/CompanyProfile.aspx?BL=0&ambnum=7299&AltNum=14937299&AltSrc=3 ) Gerber Life Insurance has a rating of…

    • 741 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    In terms of Section 45-IA of the RBI Act, 1934, it is mandatory that every…

    • 1002 Words
    • 5 Pages
    Powerful Essays
  • Better Essays

    As previously mentioned, financial intermediaries exist primarily to transfer funds from economic agents with a surplus of funds, i.e. those with incomes greater than expenditure, to those agents that have a deficit of funds, or those with incomes less than their expenditure. Banks, insurance companies and pension funds are examples of financial intermediaries. An example of an economic agent could be an individual willing to invest, or a company, institution or even the government. The transfer of funds between these economic agents occurs in one of two ways. The first process is known as direct finance. This means that the transfer of funds from economic agents with surplus funds, such as savers and lenders, to those with a deficit, or borrowers, occurs via financial markets such as the stock exchange. The second process is known as indirect finance, which means that the transfer of funds between economic agents does not occur directly from lenders to borrows, but via a financial intermediary or “middle-man”. Borrowers and lenders tend not to engage in financial…

    • 2045 Words
    • 9 Pages
    Better Essays